Case study list
Capital project prioritisation - an example of good practice
Durham County Council
Following an internal review, Durham County Council decided to introduce a more robust process for initiating options appraisals, considering appropriate financial and non-financial criteria.
The Council also wanted to prioritise capital investment proposals to reflect the corporate priorities identified in corporate improvement plans.
The key project objectives were:
- to implement a clear, robust and consistently-applied protocol for business cases for all capital investment proposals, incorporating a process to validate and regulate requests for options appraisals; and
- to ensure a formal prioritisation process through which all capital investment decisions are taken, reflecting the project's support of defined corporate priorities and the need to address issues associated with risk management.
The project process includes:
- A requirement that for all proposed capital building projects, a standard initiation pro forma is produced. The pro forma instigates preparation of the business case and, in the case of property-related proposals, also initiates the provision of estimates and options appraisals.
- A requirement that proposals must have been confirmed as service priorities by the relevant Chief Officer before an initiation document is submitted.
- The prioritisation of all relevant capital proposals using a standard bidding template, which is structured to link schemes to the key corporate outcomes and indicators identified in the Local Area Agreement, the Sustainable Communities Strategy, and the council's Corporate Plan.
- A systematic ranking of proposals on the basis of the contributions they are expected to make towards the council's key priorities, and whether they:
- are cross-cutting,
- address risks,
- involve partnership working
- are from pooled budgets,
- bring external funding,
- achieve revenue savings or bring additional income
- were identified in a formal review or inspection, or were identified as a need through the corporate performance measurement system.
- A requirement for the Asset Management Plan Working Group (AMPWG) to undertake a corporate, cross-service review of how projects will support the delivery of corporate and service objectives to produce a moderated, recommended priority list for initial consideration by the Corporate Management Team (Chief Officers).
- A requirement that proposals are then fed into the annual budget-setting process, to be considered in detail by a panel of Chief Officers and elected members who make recommendations to Cabinet for final approval.
The benefits of this process include:
- a clearly-defined process, providing a focus on forward planning linked to corporate and service visions and priorities;
- the eradication of abortive time spent on the development of estimates and studies for unsupported projects;
- greater awareness of overall funding needs and a clear view of individual service priorities in context with 'the bigger picture';
- the replacement of inter-service competitive bidding with a more collaborative approach and a shift to greater partnership working;
- revenue implications being more clearly defined and tied in to the investment decision; and
- more effective, transparent and speedy decision making.
The key learning from the project includes:
- The cross-service AMPWG provides an effective means of securing buy-in to the investment decision making process and its results, and a wider understanding of corporate priorities.
- Bid moderation is essential - service bids often overstate the contribution proposals are expected to make towards corporate priorities and to other scoring criteria;
- A bidding process that affords higher priority to projects that involve partnership working and co-location can be effective in promoting collaboration and a more corporate approach to the development of proposals.
- The AMPWG could have been more active when the process was first introduced in raising awareness within services of the process and timescales involved.
- From the outset, the process should be directly linked to a robust performance management system. This performance management system should link outputs achieved with those predicted in the bidding process, which would improve business case target setting and value for money assessment.
- Better "project management" to avoid the mass submission of bids immediately prior to the start of the annual budget setting process.